When it comes to planning your financial well-being, it goes without saying that your credit score plays a vital role in deciding how things play out. After all, this score is the most significant indicator of one’s credit history and reliability. Given the fact that 67% of Indians are more than ready to take loans, it must be said that having a high credit score is of paramount importance in modern times. Similarly, the impact of a poor credit score can be highly detrimental, throwing a sizeable wrench into a person’s financial plans.
A credit score ranges between 300 to 900 – a number that is meaningless without proper knowledge. To attain a greater understanding of your credit report, here’s a look at the implications & effect that both a good & poor credit score can have on your business.
Good Credit Score
A score that’s above 700 is generally considered to be a desirable credit score by many. Having a score in this range allows borrowers to enjoy the following benefits.
- Swift approvals:
A good credit score is indicative of the fact that – among other things – a person is financially responsible. Banks and financial institutions that check out an aspiring borrower’s credit score will attain a sense of security, approving credit requests at the drop of a hat for these individuals.
- Personalised offers:
As mentioned above, the inherent trust that authorities place on a good credit score is quite valuable for borrowers. Certain institutes actually form tailor-made loan offers with lucrative benefits for these individuals. This is the power of a good credit score – the inherent trust associated with this number means that your credit requirements will be met with the greatest of ease!
- More negotiation power:
A high credit score enables borrowers to discuss the terms of their loan application with greater freedom. This flexibility helps people choose a line of credit that best adheres to their needs and interests.
- Freedom to purchase assets:
Everyone wants to buy a car, a house, and other such assets further down the line. Securing funding is imperative in these cases, and a high credit score will help individuals achieve the same with little to no issues.
Bad Credit Score
A credit score that’s below 550 is a serious cause of concern, which needs to be addressed and improved as soon as possible. Failing to do so can lead to major issues, some of which are mentioned below.
- Frequent rejections for availing credit:
A low credit score signifies a lack of trust in a borrower’s repayment capacity. Without this assurance, it’s highly probable that the vast majority of your loan applications will be rejected right off the bat.
- Loans with undesirable conditions:
If your loan application does get approved, don’t think that you’re out of the deep waters just yet. If anything, a lack of financial viability means that your loans are bound to come with a bunch of undesirable terms and conditions – such as high-interest rates and less-than-optimal term periods, to name a few.
- Lack of negotiating power:
While negotiating for better loan offers might be a possibility, a bad credit score will severely hamper your capacity to ask for better deals. In fact, chances are that your requests might not even be entertained in the first place.
- Problems in acquiring assets:
A bad credit score can place a massive dent in your asset purchasing power. The lack of approvals when it comes to getting car loans or home loans will undoubtedly be a huge problem further down the line.
With your credit score playing a massive role in deciding your credit-availing capacity, it’s essential to realize the importance of this number and the implications of having either a good or bad score – something that we delve into with this article. You can check your credit score here: https://www.clix.capital/credit-score/ If you wish for a more personalized and detailed analysis of your credit score, just reach out to usat firstname.lastname@example.org